[deliriousga]

If by "quite a lot of smoke" you mean enough to cover the rear bumper, it's probably the oil separator. That may be causing your flat spots too. Do a search on "oil separator" here and at renntech.org and you'll find several threads on it. One of them has a picture of what to look at to see if it's the separator.

If you are getting a lot of smoke, no matter what's causing it, you should not drive it anymore until you figure it out. It could be deadly to your engine.